EUR/USD remains steady, at the brink of parity around 1.0040 as the greenback weakens


  • EUR/USD trims some of its Monday losses and clings above parity but just above July’s 10 low.
  • Recession fears persist as the US 2s-10s yield curve stays inverted.
  • Fed’s Barkin is undecided about going 50 or 75 bps in July’s Fed monetary policy meeting.
  • EU and German ZEW missed expectations, spurring a EUR/USD fall close to parity.

The EUR/USD bounces off fresh 20-year lows around the parity area, trimming some of Monday’s losses, as market sentiment wobbles, reflected by US equities fluctuating between gainers and losers, ahead of the US June Consumer Price Index (CPI) to be released on Wednesday.

At the time of writing, the EUR/USD is trading at 1.0052 after tripping towards 1.0000 during the European session on worse-than-expected German data. The pair then jumped towards the daily highs around 1.0073, 10 pips shy of the 50-hour EMA around 1.0082, which put a lid on upward EUR/USD prices.

EUR/USD rises despite investors’ fragile mood

The market mood is mixed, as portrayed by US equities fluctuating as recession fears persist. The US 2s-10s yield curve stays inverted for the second time in the week, reaching -0.107%, a level last seen in 2007. Meanwhile, the US Dollar Index, a gauge of the greenback’s value, takes a breather, down 0.20% at 107.986, a tailwind for the EUR/USD, which dropped close to the parity on weaker than expected EU news.

In the meantime, Fed speakers did little to nothing during the New York session to boost the greenback. Richmond’s Fed President Thomas Barkin said that he was reserving judgment on a 50 or 75 bps rate hike in the July meeting and reiterated that he would like real rates positive across the curve. Furthermore added that a negative Q2 GDP would take it “seriously” while adding that he expects another elevated inflation report.

The White House (WH) expects US CPI to remain elevated but downplayed recession worries in a memo reported by Reuters. The White House added that the “Impact of energy and food prices on annual headline CPI in June will likely exceed 40%, based on market expectations.”

Also read:

During the European session, the EU and German ZEW Surveys of Economic Sentiment missed expectations, sparked by the bloc’s energy crisis, supply chain disruptions, and the ECB’s intentions to hike interest rates. according to ZEW President Achim Wambach, “Experts assess the current economic situation significantly more negatively than in the previous month and have further lowered their already unfavorable forecast for the next six months.”

What to watch

The Eurozone economic docket will feature the Industrial Production for the Eurozone and Germany’s Inflation Rate. Across the pond, the US economic calendar will report June’s inflation rate, expected at 8.8% YoY, while core CPI is estimated at 5.8% YoY. Later, EUR/USD traders will get some clues in the Fed’s Beige Book, which the Fed uses in its monetary policy meetings.

EUR/USD Key Technical Levels

EUR/USD

Overview
Today last price 1.0044
Today Daily Change 0.0003
Today Daily Change % 0.03
Today daily open 1.0041
 
Trends
Daily SMA20 1.0416
Daily SMA50 1.0528
Daily SMA100 1.0734
Daily SMA200 1.1065
 
Levels
Previous Daily High 1.0186
Previous Daily Low 1.0034
Previous Weekly High 1.0463
Previous Weekly Low 1.0072
Previous Monthly High 1.0774
Previous Monthly Low 1.0359
Daily Fibonacci 38.2% 1.0092
Daily Fibonacci 61.8% 1.0128
Daily Pivot Point S1 0.9988
Daily Pivot Point S2 0.9935
Daily Pivot Point S3 0.9836
Daily Pivot Point R1 1.014
Daily Pivot Point R2 1.0238
Daily Pivot Point R3 1.0291

 

 

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